Estonian startups pay €40 million in employment taxes in Q1 2022

Estonian startups paid €40 million in employment taxes in the first quarter of 2022, generated €417 million in turnover and raised €907 million in investments; the 1,363 startups in the Estonian Startup Database offer almost 9,000 jobs.

According to Startup Estonia, a governmental initiative aimed at supercharging the Estonian startup ecosystem, 20 new startups created in 2022 have found their way into the database.

“35% of the startups in the database have been active for five or more years. The largest sector in terms of active startups is business software and HR with 250 active companies (18% of all startups in the Estonian Startup Database), followed by fintech with 183 active startups (13%) and consumer products and services with 147 active companies (11%),” the organisation said.

The employee count in Estonian startups is growing upwards. According to the Estonian Tax and Customs Board, Estonian startups employed 8,948 people as of 31 March, which is 9% more than at the end of 2021 and 34% more than in the first quarter of 2021.

Bolt, Wise and Veriff the biggest contributors of employment taxes

“The biggest employers among startups were Wise (1,338 employees), Bolt (1,144), Swappie (519), Veriff (386) and Starship Technologies (237). Moreover, 57% of the total number of people employed in the whole startup sector at the end of Q1 of 2022 were employed by TOP20 startups.”

A child and a Starship delivery robot in Tallinn, Estonia. Photo by Renee Altrov.

Based on the statistics from the Estonian Tax and Customs Board, there is also a growth in the employment taxes paid, as the sum of employment tax contribution at the end of the first quarter of 2022 was €39.5 million (+44% compared with the first quarter of 2021 and +13% compared with the fourth quarter 2021).

The substantial contributors of employment taxes among startups in the first quarter were Bolt with €6.4 million, Wise with €5.2 million, Veriff with €1.7 million, Starship Technologies with €1.1 million and Paxful with €1 million.

“Regarding the largest contributing startup sectors in terms of employment taxes, we can highlight the following for the first quarter of 2022: finTech (€11.1 million); transportation and logistics (€10 million); business software, services and HR (€5 million); cybertech (€3.2 million); and communication (€1.7 million),” Startup Estonia said.

Twenty-two funding deals signed

In the first quarter of 2022, Estonian startups generated €417 million in turnover, growing by 57% year-on-year. Among startups, the largest turnovers were generated by Bolt (€178.4 million) with a bit less than half of the turnover in the sector, Swappie €20.4 million, Veriff €13.1 million, 3Commas €8.5 million, Comodule €7.8 million and Adcash €7.8 million.

Tuul electric scooter, manufactured by Comodule.

Estonian startups signed 22 funding deals for €906.6 million in the first quarter of 2022 (compared with €194 million at the end of the first quarter of 2021). The average deal size was €41.2 million per deal, and 16 startups raised investments of more than €1 million.

“Investment figures are heavily affected by Bolt’s massive investment round (€628 million). Next in line, Veriff raised €89 million, Starship Technologies €87.4 million and Glia €40.9 million. With these investment rounds, Veriff in January and Glia in March also became Estonian next unicorns, further ensuring Estonia’s position as first in Europe in the number of unicorns per capita.”

Startup Estonia is a governmental initiative financed by the European Regional Development Fund, aimed at supercharging the Estonian startup ecosystem.

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